Monday, May 27, 2024
spot_img

India’s forex reserves dip by $2.83 billion to $640.3 billion

Date:

Share post:

spot_img
spot_img
Mumbai, April 26: India’s forex reserves contracted by $2.83 billion to $640.33 billion as of April 19, the latest data released by the RBI on Friday showed.

The country’s forex kitty had declined by $5.4 billion to $643.16 billion in the preceding week that ended on April 12 for the first time after rising steadily for eight weeks to a lifetime high.

The latest figures show that Foreign currency assets (FCAs) contracted by $3.79 billion to $560.86 billion while the gold reserves which also form part of the forex kitty went up by increased by $1.01 billion to $56.81 billion, whereas SDRs were down by $43 million to $18.03 billion.

Market analysts attribute the decline in foreign currency assets to the RBI actively releasing dollars in the market to curb the volatility in the rupee.

The Indian currency has tended to weaken as oil prices have been on the rise, which has triggered an increase in the demand for dollars to finance costlier imports.

The fall in the foreign currency portion of the reserves has been cushioned by the increase in the value of gold assets held by the RBI.

Central banks have been buying gold in recent months as an investment in safe-haven assets amid geopolitical uncertainties triggered by the Middle East conflict.

RBI Governor Shaktikanta Das had earlier this month referred to the record foreign exchange reserves as a reflection of the strength of the Indian economy.

“It is our prime focus to build a strong buffer in the form of a substantial quantum of forex reserves which will help us when the cycle turns or when it rains heavily,” he remarked while unveiling the first monetary policy review of the current financial year that began on April 1.

India’s forex reserves, including the central bank’s forward holdings, can now cover around 11 months of imports, which is a two-year-high.

IANS

spot_img
spot_img

Related articles

Assault on the poorest

Editor I was shocked to read in The Shillong Times (May 23, 2024) about members of the Hynniewtrep Youth...

PM takes a leaf out of Arab rulers’ book for invoking divinity to his politics

Finally, a taste of American-style direct debate between Modi and Rahul Gandhi By K Raveendran In asserting his ‘indestructability’, Narendra...

The Dilemma Called Saipung

By HH Mohrmen Nestled close to the Saipung reserved forest is the area where the Biate people live, and...

The Countdown Begins

India’s jumbo-scale voting exercise has completed six phases and is moving to the June 1 final phase. The...